Downgrade is Long overdue. BRK have to have more reserves to cover global warming and terrorist attacks and stop buying risky assets like stocks. Split the company to to prevent further downgrade or better yet pass the stock holdings to shareholders
The ratings agencies (including S&P) are likely very sensitive to the black eye they got from their demonstrated failure to accurately measure credit worthiness as they were certifying so many sub-prime loans as investment grade... they may be looking to be too cautious now to show that they are willing to be.
This is also an agency that said that the US government may have difficulty paying its bills... when the US government has the ability to print as much money as it chooses to print.
The market knows better... when S&P downgraded the US (I know that is not a very good analogy, as Berkshire certainly could not print its own money), more money flowed into treasuries. As Berkshire got downgraded, more money flowed into Berkshire's stock.
Here is something to keep in mind: Berkshire can self-finance what it does... it borrows money to take advantage of super cheap financing costs... but, it does not rely upon it. The rating from S&P is not likely a major issue for them... with the diverse and strong revenue streams they have coming in, combined with an impressive record of underwriting profits from insurance (not always going to happen, but over time is consistently happening), it is not likely that Berkshire is going to be in financial trouble worthy of a downgrade.
Just my opinion... and I have certainly been known to be wrong before...:)
I see that S&P has a lot of influence. Did you see this stock tank at the news! lol
They're a waste of air if you ask me. One wonders why we give them the time of day now that we have seen what their true agenda was for so many decades.
Really? S&P is concerned? Perhaps 85% of the rest of the economy will collapse before Berkshire would. PERHAPS BERKSHIRE WOULDN'T PAY THEM OFF! That would be the only logical reason I can think of for them to do this. Perhaps they should stick to crooked banks and bad real estate paper. What a joke!!!!
So what you are saying is your insurance premiums rates should go up because we anticipate more national disasters and attacks around the world. So a lot more growth in the Insurance business.
That would be one way of doing it, but exit the business is more prudent for current shareholders
If you collect higher premiums it hurts sales because business is not able to afford the price
If business is spun of you remove a possibility of super hurricane(s) destroying the whole Buffets Empire
Remember, it is not global warming. It is now climate change. And once the cyclical weather patterns stabilize it will be something else. Or they could just call it what it is, wealth re-distribution.
The S&P rating agency is a joke. I remember when it downgraded the US debt rating and left France a higher rating. Then, when Buffet criticized the downgrade of the US debt rating, Berkshire was promptly downgraded as well. It is like arguing with an umpire over a call that is obviously wrong. You just have to roll your eyes, shake your head and ignore the rating. If anything, I bought more BRK-B on the dips. Oh, by the way Mr. Buffet, be my guest to downgrade the S&P , asap. BRK-B is well on its way to $120 a share.
Sentiment: Strong Buy